Molecular mechanisms in embryogenesis of the amphibian Xenopus laevis and the zebrafish have been studied. Pattern formation is controlled in the embryo by the action of cell signalling molecules that elicit the expression of transcription factor-encoding genes in a spatially and temporally regulated way. The focus of this laboratory has been the study of the LIM class of homeobox genes whose members are instrumental in pattern formation and tissue differentiation. Three LIM genes have been analyzed in detail. The Xenopus Xlim-1 gene and the homologous zebrafish and mouse lim1 genes, are expressed in three distinct lineages: (1) The dorsal mesoderm during gastrulation, an area know as Spemann's organizer in the frog. Expression in this area is responsive to the mesoderm inducer activin. (2) The pronephros. (3) Specific regions of the CNS. Expression in regions 2 and 3 is sensitive to retinoic acid (RA). The function of Xlim-1 has been sudied by ectopic expression in Xenopus. The results indicate that (i) the cysteine-rich LIM domains are negative regulatory domains, so that wild type Xlim-1 protein is largely inactive; mutations in the LIM domains reveal its functional potential. (ii) Mutated Xlim-1 can activate neural markers in naive cells, and muscle markers in cooperation with Xbra. Both of these activities are mediated through intercellular communication. (iii) Mutated Xlim-1 activates, probably directly, the goosecoid gene, another homeobox gene important in early embryogenesis. Activin responsive transcriptional regulation of the Xlim-1 gene appears to be based on a constitutive promoter and an activin-sensitive silencer located in the first intron. The Xlim-2 and zebrafish lim2 genes are very similar to Xlim-1/lim1, but the expression pattern is very different. Xlim-2/lim2 is expressed in the entire ectoderm at early stages, and subsequently becomes restricted to the diencephalon and certain cells in the spinal cord. Xlim-2 expression is not responsive to activin or RA. The pattern of the Xlim-3 gene has been described in the previous Report. Zebrafish and mouse lim3 genes have similar expression patterns; the early and high-level expression in the pituitary is of particular interest. Mechanisms of cell-to-cell signalling in early embryogenesis has been studied in frogs and zebrafish. Evidence has been obtained for the involvement of glycogen synthase kinase-3 (GSK-3) the dorsalizing signalling cascade in Xenopus. In the zebrafish embryo, overexpression of the nodal protein, a growth factor in the TGF-- family, leads to duplication of the dorsal axis. This duplication is initiated by the formation of an ectopic dorsal center as visualized by the expression of the goosecoid and lim1 genes. A role for a nodal-like factor in fish embryogenesis is suggested.